COAH developer fees serve good cause

New Jersey residents want to be able to live a reasonable distance from where they work. Yet there is a critical shortage of housing in many parts of the state, forcing too many of us to put up with long, expensive commutes, and steadily increasing traffic congestion, accidents and pollution.

New Jersey's recent housing reforms have begun to address this predicament by providing a plan for increasing housing choices as communities grow.

One of the tools the Legislature crafted to reach this goal is a 2.5 percent developer fee, charged by a municipality on new commercial development. Business groups including NAIOP, a commercial real estate developer trade association, were on board with the proposal as it made its way through the Legislature last year.

Now, however, some advocates for developers propose doing away with this fee. In a Jan. 28 article on this page, Lori Grifa called the fee an "artificial impediment" to business. But the article did not take into account the connection between where we live and where we work.

When a business creates jobs it also creates a local need for homes for the employees who take those jobs. It is only fair that businesses contribute a small fraction of their profit to help our towns accommodate the increased demand spurred by their commercial activities. This is not only corporate responsibility, but good business. Having homes close to jobs, that working people can afford, not only makes individual businesses stronger, but helps the entire state's economy. It is also part of doing business in a state with aging infrastructure -- including housing -- and where land for development is in short supply.

Although a phase-in period may be in order, we disagree that commercial developers are unjustly burdened by the fee. The truth is that we are all responsible in some way for creating the homes we need so our state can grow and prosper. Residential developers pay fees to build. When private individuals build or purchase a home, they pay a real estate transfer fee. A portion of this goes into the state's housing trust fund to finance housing development. The state and federal governments also dedicate funds to housing. Everyone contributes. Commercial developers need to assume their share of the responsibility.

New Jersey assesses impact fees for sewer hook-ups, roads and water lines. Having enough housing is just as much a part of the infrastructure our state needs as roads, parks and a clean environment. The non-residential developer fee is a modest way for private developers to be part of the solution to our state's economic needs. New Jersey's failure in recent years to provide enough housing from which people can get to work without long, costly commutes has become a drag on the state's competitiveness and economic growth.

Something that goes much further than freezing the developer fee is going on, however. The legislation proposing the moratorium on the developer fee is a Trojan horse.

Put forward by state Sen. Raymond Lesniak, and approved by the Senate Economic Growth Committee, the bill (S2485) opens the door by proposing a moratorium on the fee. Lesniak (D-Union) claims this will spur growth. But he and other supporters of the bill revealed their true agenda by adding several other provisions to the bill. They not only call for an 18-month moratorium on the fee, but also for a moratorium on the commercial share of fair-share housing obligations during this period, as well as reimbursement of the millions of dollars towns have already raised from the fee.

The truth is, most homes that New Jersey residents can afford have been built without public subsidies or developer fees. New Jersey towns have more than $230 million in developer fees stockpiled from past years that can be used to help where needed, in addition to other state, federal and private dollars. Why would our elected leaders stop the clock on towns' fair housing responsibilities when there are significant resources already in hand to create jobs and homes, and when the new developer fee is only a limited part of the financial picture? Should municipalities tell their residents and workers that their homes will have to wait? What about the unemployed workers who would have had jobs building those homes?

Despite their claims of good intentions, the committee's effort to undo last year's achievements would prevent or delay homes from getting built in our communities. The irresponsible call for an end to commercial developer fees is but one attack in the ongoing assault on the historic housing reforms courageously passed last year by the state Legislature and signed into law by the governor. We urge our leaders and lawmakers to reject S2485 and stand firm against the forces intent on rolling back these advances. It is time to let the reforms work. It is time to go forward.

Diane Sterner is executive director of the Housing and Community Development Network of New Jersey.